Kondopoga pulpmill announced the launch of the third papermaking machine which produces newsprint, BM7, in late March. More than 60% of mill’s products are exported. In addition, BM3 is also operating which produces packaging paper.
The company plans to work with three newsprint machines up to about May 20 and prepare another one for operation. If the mill manages to create adequate supply of wood before the spring muddy season, fourth machine could be started earlier.
Meanwhile, general director Vladimir Bibilov applied for early release from his post, he was later appointed chairman of the Board of Directors. Upon recommendation of the regional government, the Board of Directors has decided to appoint Dmitry Turkevich as new CEO for five years. Earlier, Mr. Turkevich headed one of the subsidiaries of ChTPZ metallurgical holding that manages its non-core assets.
Shortly after the appointment, Turkevich was interviewed by Respublika Karelia agency, where he stated that the situation at the enterprise is “complicated but not critical". He added that full capacity is achievable by the end of summer of 2013.
The muddy season will soon force to transport timber by rail, which will immediately increase production costs, Turkevich said. Meanwhile, the high cost of newsprint production remains the major problem of the company.
"For the full-course production working capital is needed, but the company, which is under external management, is certainly not able to get the credit, the Central Bank will not allow this", he said.
Dmitry Turkevich sees the creation of affiliates that can obtain loans, including those for purchase of raw materials, as one way to solve the problem. Recently the company established trading house Kondopoga, whose major tasks will be to procure raw materials and electricity for the mill.
Commenting on the managers’ denial to establish own logging, Mr.
Turkevich noted that the company uses only spruce pulpwood, so other products in this case will be sold, which creates another non-core, separate business.
"We don’t have fundamental problems with demand at the moment, portfolio of orders is established, and its geography is very wide, from Europe to South-East Asia and India. I think that for about seven years, demand for newsprint will be sufficient for stable operations of the mill. During this time, it is necessary to conduct serious modernization in order to convert it to pulp production", Turkevich concluded.